OREANDA-NEWS. October 21, 2015. Why has the major shareholder of JSC “Ventspils nafta” made a mandatory share buy-out offer?

On September 17 this year, JSC “Ventspils nafta” received information from its shareholder “Euromin Holdings (Cyprus) Limited” (company 100% owned by the Vitol Group), stating that the shareholder has acquired additional 43.25% or 45’190’423 shares of the company. Therefore, “Euromin Holdings (Cyprus) Limited” currently owns 93.24% of JSC “Ventspils nafta” shares.

Regulatory enactments prescribe – if a shareholder has obtained 50% and more shares, it is obliged to make an obligatory buy-out offer for minority shareholders.

The Financial and Capital Market Commission has approved the buy-out price per share proposed by “Euromin Holdings (Cyprus) Limited”: 4.56 EUR.

How can I make sure that I own JSC "Ventspils nafta" shares? 

If a person knows that he/she own shares, yet nothing has been done to them since the moment of purchase and they have not been transferred to a securities account in a bank or a broker company, then they are still stored at the Initial Register of the Latvian Central Depositary.

To find out information about owned shares, the owners need to go to the Latvian Central Depositary with a personal identification document, where it will be possible to find what kind of shares and how many are owned and if any dividends have accrued for these shares.

Information about shares can also be received electronically through Lursoft. The database can be accessed with one’s internet bank account (no need to be a Lursoft subscriber). Service charge for individuals – 1.42 EUR.

Location:
Latvian Central Depositary
Department of Securities Record-keeping and Payments
Tel.: +371 67 212 431
E-mail: lcd.riga@nasdaq.com

Working hours:
Week days 8:30 – 17:30
Fridays and pre-holiday days 8:30 – 16:30

Can I also learn about my relatives and JSC "Ventspils nafta" shares owned by them at the Central Depositary?

Information from the Initial Register about shares owned by a person can be received only by the person itself, by presenting a personal identification document, or by their authorised representative, by presenting a personal identification document and a power of attorney certified by a notary.

Can JSC "Ventspils nafta" shares be inherited? 

Absolutely all shares are inherited – both the ones stored on the owner’s securities account and the ones stored at the Initial Register.

To find out whether there are any shares at the Initial Register that were owned by the deceased person, a notary or a bailiff who is arranging the particular inheritance matter, shall send a written request to the Latvian Central Depositary. The Latvian Central Depositary prepares a written response – a reference-statement from the Initial Register – to the received request.

The person-heir shall go to a bank, open a securities account and deregister the shares inherited on the basis of an inheritance certificate – they are transferred onto the heir’s securities account.

What should I do if I want to sell my JSC “Ventspils nafta” shares but they are at the Initial Register? 

For a share owner to be able to freely handle their owned securities, inter alia, to sell them, the owner needs to deregister the securities.

Deregistration is transfer of shares on request of their owner from the Initial Register to the owner’s securities account with the account holder (bank or broker company).

The share owner shall open a securities account with a bank or broker company and submit a deregistration task. Some banks offer an option to do this on the internet bank.

The bank or broker company sends a deregistration request to the Latvian Central Depositary, after which the Depositary transfers the shares to the bank or broker company.

List of credit institutions and investment broker companies: http://www.nasdaqomxbaltic.com/lv/csds/depozitarija-dalibnieki/dalibnieku-saraksts.

What do I have to do practically to sell the JSC “Ventspils nafta” shares owned by me?

A shareholder who has deregistered their shares and wants to accept the obligatory share buy-out offer can freely choose one of two ways of selling their shares.

1. Accepting the offer by using the Stock Exchange’s system

Through mediation of a credit institution or an investment broker company, which is a member of the Stock Exchange, a shareholder submits a share sale application, indicating that the transaction is to be concluded at the Stock Exchange’s trade system Genium INET, at the RSE Equities IPO market segment.

List of credit institutions and investment broker companies, which are members of the Stock Exchange: http://www.nasdaqomxbaltic.com/market/?pg=members&lang=lv.

The share sale task shall specify the security, number and price of the securities, which must be equal to the buy-out price set in the share buy-out prospectus. The number of shares specified in the share sale task shall not exceed the maximum number of shares to be bought out.

Share sale tasks can be submitted to the Stock Exchange’s Trade System within the fixed offer time period every trade day from 9:00 AM until 4:00 PM. On the last day of the offer period, share sale tasks can be submitted until 1:00 PM. On the day of offer at 4:30 PM, the last matching of share sale tasks with purchase task will take place.

2. Accepting the offer, by using the non-Stock Exchange system of settlements organised by LCD

Through mediation of a credit institution or an investment broker company that a shareholder has opened a financial instrument account with, the shareholder shall submit a share sale application, specifying that the transaction is to be concluded outside regulated market (Stock Exchange) and payments are to be made in accordance with the principle of simultaneity.

The application to be submitted to a credit institution or investment broker company, shall specify the following information about the share seller, buyer and shares to be sold:

  1. seller’s name, surname and personal ID number (if the shareholder is a physical person and a personal ID number is allotted to him/her) or name (company), registration and legal address (if the shareholder is a legal entity);
  2. the buyer’s (Offerer’s) name and registration number – EUROMIN HOLDINGS (CYPRUS) LIMITED, registration number in Cyprus: HE69529;
  3. The seller’s financial instrument account number, in which the shares offered for sale are stored, and name of the credit institution or investment broker company that the seller has an opened financial instrument account with;
  4. the seller’s (shareholder’s) current account number, to which the shareholder wants to receive payment for share, and credit institution that the shareholder has an opened current account with;
  5. the buyer’s (Offerer’s) financial instrument account number and name of the credit institution that the buyer has an opened  financial instrument account with – 0086 4102 99102026537, JSC “LHV Pank”;
  6. ISIN cod of shares to be sold – LV0000100816;
  7. number of shares to be sold;
  8. buy-out price of one share – 4.56 EUR;
  9. day of settlements – the fifth day after the end of the offer time period fixed in Clause 7;
  10. reason for submission of application – acceptance of obligatory share buy-out offer of JOINT STOCK COMPANY “VENTSPILS NAFTA”.

No later than on the next day until 4:00 PM after the set end of the offer time period, the credit institution or investment broker company that the shareholder has opened a financial instrument account with shall enter the investor’s application into the LCD settlements system.

Money for the sold shares will be received on the fifth day after the end of buy-out time period (30 days after the publication in “Latvijas v?stnesis”).

After deregistration of JSC “Ventspils nafta” shares, will I be able o also receive dividends previously paid to shareholders?

On Monday of the next week after deregistration of shares has been performed, the Central Depositary transfers the accrued dividends to the bank or broker company, which are remitted to the share owner’s money account.

Dividends historically paid by JSC “Ventspils nafta” to shareholders:

Year LVL per one share EUR per one share
1998 0.03 0.04
1999 0.03 0.04
2003 0.01 0.01
2009 0.48 0.68

*using the exchange rate set by the Bank of Latvia on January 1, 2014: 1 EUR = 0.702804 LVL

Each shareholder themselves shall pay to the State Revenue Service tax from capital gain, if there is any. If profit has been distributed and decision on payment of dividends has been passed until January 1, 2010, personal income tax is not applicable to them.

Is it mandatory that I sell JSC “Ventspils nafta” shares?

Obligatory share buy-out does not obligate minority shareholders to sell their shares. Each shareholder must decide for themselves whether they are satisfied with the offered price.

In what case are minority shareholders obligated to sell their shares? 

If “Euromin Holdings (Cyprus) LImited” obtains 95% and more shares, it will have rights to make the final share buy-out offer to minority shareholders. In such case, minority shareholders will not be able to choose whether they want to sell their shares in the company or not. Shares from bank securities accounts of minority shareholders will be automatically transferred to the major shareholder and in return each minority shareholder will receive money in their money bank account attached to the respective securities account.

If shares are at the Initial Register, the shareholder will automatically be offered “rights to money” instead of these shares. For the owner to receive this money, they will have to go to a bank an carry out deregistration process, only this time – for “rights to money”.

How was the mandatory share buy-out price determined?

The mandatory share buy-out price was set according to the value of the shares, which was calculated by dividing the net assets of the company with the number of shares issued.

What has been the JSC “Ventspils nafta” share price in the last three years?

Changes in JSC “Ventspils nafta” share price in the last three years, EUR

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